I've been running VMware for a long time, all versions I've tried (2/3/4) have worked fine with all the Nvidia Xfree86 drivers released.

All the Nvidia driver does is accelerate X, then VMware hooks into X and uses standard X instructions to display the 'VMware client' in a window.

The driver for the VMware client is VMware's own SVGA driver, The Windows XP & 9X one's are great but running Linux on VMware in Linux isn't great because Linux Client txt mode doesn't display properly. (but X displays fine)